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Business Writer
The Reserve Bank of Zimbabwe has raised the weekly foreign currency allocation for fuel imports after demand increased by 30 percent, Reserve Bank governor John Mangudya has said.
The demand for fuel went up recently driven by onset of the festive season, coupled with increased consumption by farmers due to the start of the summer cropping season, Dr Mangudya told Business Weekly in an interview. He said weekly foreign currency allocations have been raised by 25 percent to $20 million from $15 million.
This would also help stabilize fuel prices. According to official figures, Zimbabwe consumes an average of 1,5 million to 2,5 million litres of diesel and petrol per day respectively.
“Foreign currency requirements for fuel has gone up by 30 percent due to increased demand for preparation for the agriculture season and the commencement of the festive season,” said Mangudya, allaying fears for shortages during the Christmas holidays.
Some economic analysts are of the opinion that the increased demand for fuel could be as a result of change in sentiment towards “a stable” new Government and general sense of hope among people.
“This new dispensation has given people some kind of hope and renewed confidence and we are likely to see many people spending on commodities such as fuel during this festive season,” said a Harare based analyst.
We are also going to see high retail sales and this will in turn trigger huge demand for fuel.” On the agriculture side, he said the Government’s agriculture programmes have pushed demand upwards.
Trek general manager Onias Sanangura confirmed the central bank had increased fuel allocations saying it was unlikely that the country would suffer shortages and price hikes.
“We should have enough stocks to ensure uninterrupted supplies during the first season because the central bank has increased foreign allocations to the players,” he said.
Mangudya said the central bank was drawing down on the on the $600 million stabilization facility for the importations of fuel and other critical commodities such as drugs.
The RBZ negotiated for an enhanced nostro stabilisation facility of $600 million from Afreximbank to manage the cyclical nature of Zimbabwe’s foreign exchange receipts.
The Afreximbank nostro stabilisation facility is meant to ensure that the revival of firms is strengthened and that critical imports of fuel, electricity and crude oil for cooking oil are assured.
“We have made some significant draw downs on the facility and this has helped to facilitate importations of critical commodities,” said the central bank chief.”
On Tuesday, Afreximbank announced a $1,5 billion economic stabilization package for Zimbabwe to revive key sectors of the economy suffering from lack on investments. Afreximbank would also provide investment guarantees for foreign investors.
Bongani Ndlovu